Letter: Consumers stuck with hidden tax costs

Posted: January 24, 2013 - 8:14pm

The Republican presidential campaign was so pathetic, and the politicians were so careful not to point out the real danger of trying to solve the nation’s fiscal problems with higher taxes that it is no wonder so many uninformed voters chose to follow the what’s-in-it-for me route.

Would someone please tell me how our Washington bureaucrats think that we ordinary citizens are that stupid: Their current confusion is how much to soak the wealthy, and how much corporations and small businesses can be taxed and still keep them in the United States.

It is Economics 101.

Look at a corporation’s profit and loss, and it will show a bottom line for net profit after taxes. That is the line company officers and stockholders have to show at a determined positive number.

Call lines above the bottom anything you wish, but the fact is everything above the bottom line is simply the cost of goods and services, and must go into the pricing of those goods and services with enough profit for the bottom line. All of those costs are paid by consumers.

With inflated operating costs, companies cannot compete with foreign producers, so they move overseas. Who wins and who loses?

Top-flight executives aren’t dumb, and will negotiate their contracts on the basis of take-home pay after taxes, but their total cost is included in the cost of goods and services, and is eventually paid by consumers.

There you have it — virtually all taxes are paid by consumers, and the citizens who are hurt the worst are those of us with middle and lower incomes.

It could make interesting reading to select a number of products and point out how much of the cost of those products is hidden taxes.